April 25, 2011

Fiscal Restraint, Pension Reform Can't Wait

[This Marlin Oil advertorial appears in the April 28 edition of The City Sentinel.]

David Ignatius is one of the relatively conservative writers in the stable of columnists with The Washington Post. He had a good essay that was printed in last Sunday's editions of The Oklahoman.

Ignatius made a somewhat complicated case for federal budget discipline, but here is his bottom line:
The longer [President Barack] Obama waits to hammer out his budget deal, the greater the collateral damage is going to be. David Smick, a leading financial analyst, says that some foreign central bank regulators are warning about the risks of U.S. Treasury securities. Last Monday's warning by Standard & Poor's that it might cut America's AAA bond rating will increase such concerns.
The "dark humor" joke for years among U.S. budget-watchers has been this: "The bad news is China owns a lot of America's debt. The good news is China owns a lot of America's debt." Now, Ignatius points out, China may be on the verge of slashing its purchase of American debt.

The foregoing brings to mind Oklahoma's ticking pension time bomb. The Legislature is moving on reforms that will, if approved in the state House and Senate and then signed into law by Governor Mary Fallin, trim perhaps $5 billion from an astonishing $16 billion unfunded pension debt.
Click to enlarge (if you dare)

The extent of staggering malfeasance in past Oklahoma policies is only beginning to be understood. In a report on "Pensions for Pols" for CapitolBeatOK over Easter weekend, editor Patrick B. McGuigan documented a laundry list of almost unbelievable retirement income streams for prominent politicians.

There's Clifton Scott, former state auditor and inspector. In his time working for the state of Oklahoma, he paid in $106,989 in a 46-year career -- yet his annual pension in 2010 was $157,488. To give this some context, the governor of Oklahoma is paid $147,000 a year, total. Scott is making almost $11,000 more than that, and he's retired. Cal Hobson is doing fine, Oklahoma: His pension last year was $77,327. During a 33-year career, Hobson paid in $79,938.

Gene Stipe is getting $94,602 every year, after paying in a grand total of $72,370 in his career. Then, there's Herb Rozell, the former state senator now on the state Board of Education. Rozell's retirement checks last year came to $71,644. He paid in $77,228 over 32 years

Both Scott and Hobson actually have drawn pension income while still holding state jobs. Scott left the school lands commission in wake of a major scandal involving a subordinate. Hobson is still employed by state government, working for the University of Oklahoma.

Real pension reform is essential to Oklahoma's future economic health. Of course, the federal debt must be brought under control before it winds up controlling all of us.

Ignatius ended his column with this perfect line from William Shakespeare, in the tragedy of Macbeth: "If it were done … then 'twere well it were done quickly."

It's time for real pension reform in Oklahoma, and a clear-eyed approach to cutting federal spending. Now.

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